Crypto Lending Rises Again… But Have They Solved the Risks?
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Written by:
- Christina Comben, staff writer
- Edited by: Andrew Fenton, staff editor
Published: Oct 8, 2026
Crypto lending has risen again, with a 55% increase since July. However, the sector faces new challenges from AI-assisted hacks and interlinked protocol risks.
As charts turn green, crypto lending interest rebounds after a poor Q2. According to Galaxy, $11.33 billion left the sector in the second quarter, partly due to the Kelp DAO hack in April, which affected Aave users' access to their ETH.
Since July, the total lending value locked has surpassed $56 billion. But with this growth comes a larger target for hackers.
Stani Kulechov, founder and CEO of Aave Labs, highlights the expanding attack surface:
"When a protocol accepts a token as collateral, it also accepts that token’s bridge, its verifier configuration, its oracle, and its issuer’s operational security."
The Kelp DAO exploit in April created unbacked rsETH, impacting Aave's deposits.
Kulechov explains Aave's new security approach, emphasizing a holistic view beyond smart contracts.
Thomas Wu, CFO of Ledn, agrees: "Every wrapper, bridge, and oracle between the lender and the underlying asset is another potential failure point."
Sid Powell, CEO of Maple, suggests lenders consider potential borrower failures.
Sam MacPherson, CEO of Spark, highlights Spark's risk management, including governance design, operational security, and collateral quality.
Spark phased out rsETH before the April exploit, recognizing its low usage and revenue didn't justify the additional risk.
Kulechov concludes that Aave has implemented similar mechanisms to enhance security across the wider ecosystem.